ph stocks track U.S. stocks while the peso's outlook gets even sunnier, notwithstanding todays blip

Tracking the U.S. stocks
Prior to the trading hours at the Philippine Stock Exchange Tue (Feb. 5,2008), the DJIA was down 108.03 points, the Nasdaq down 30.51 points and the S&P down by 14.60 points. Then I watched how our market tracked the drop in U.S. prices. The Psei slipped about 39 points, ending around four straight days of increase. Gainers outnumbered losers 71 to 32 while 50 remained unchanged. I remember some people telling me that our market is immature and easily subject to rumors and the "hot tip." While I don't have any first hand knowledge of that, my theory that Philippine Investors are watching the U.S. market all the more closely these days and taking cues from it, above all else, seems to be getting more credible everyday.



Mixed business news
RCBC came in positive as "Net profit rose 56 percent to P3.21 billion from P2.05 billion in 2006. This beat the bank's net profit target of P2.5 billion." Inquirer.net (RCB closed @ 18.50/sh)

Globe shared its pessimism highlighting the strong peso, rising oil prices, and an economic slowdown in the US could as factors that could weaken consumer spending. Globe's numbers couldn't have been the source of their pessimism as "Globe reported after trading hours Monday a 13-percent increase in 2007 net profit to P13.3 billion on record revenue. It ended last year with 20.3 million cellphone subscribers, up 30 percent from 2006."inquirer.net
(Globe is a recommended buy both in the fundamental and technical analysis of Citisec. GLO closed @ p1600/sh)

Meralco: Our dear president was reported to be pushing for Meralco to be made to lower its rates. I had been doing some selling of MER lately and have been kicking myself until I read this. As of this morning citisec pointed out that MER has been outdoing the index over the past three months and is looking to do much better thanks to higher rates. As I don't like to underestimate the persuasiveness of our President, I think citisec should modify their recommendation. I recall one of my advisers telling me that Meralco has the public interest medling with it all the time, hence he believes it will never really be as profitable as ordinary private entities. (MER closed @ 81.50/sh)




Sunny Outlook for the Peso
The peso suffered a blip thanks to our entertaining world of politics. Yet, this has no reference to the long term outlook. Just yesterday, Citigroup was quoted as projecting the Peso to enter the thirties by hitting Php39 to a single greenback within this quarter. The same bank projects Php35 to $1 within the year. The peso closed today at 40.52.

This sunny outlook, casts shadows on our exports, BPO, OFWs and everyone who earns in dollars. Yet, today the BSP highlighted the silver lining. According the BSP, many Filipinos were better off thanks to the stronger peso. One very obvious thing is that with more buying power, we as a country were spared a bit from the steep increase in the world oil price. Carrying the logic further, Filipinos will benefit from cheaper imports.